Companies that invest in transformation of experience — across people, process and technology — demonstrate superior performance compared to those who do not.
The Adobe-commissioned Forrester report, The Business Impact Of Investing In Experience, A Spotlight On Asia Pacific, noted that firms which have been defined as experience-driven businesses consistently deliver on metrics that align to their revenue growth, customer-acquisition and customer-retention goals.
To drive revenue growth and customer retention, enterprises must orchestrate effective, easy and emotionally rich experiences for their customers.
The Forrester report cites three business imperatives emerging as the top priorities for more than 80 per cent of firms. These are: increasing customer retention and loyalty; growing revenue; and improving experience for customers.
Forrester found that enterprises are making necessary moves towards improving customer experience (CX) across the customer life cycle. Businesses are beginning to focus on improving end-to-end CX rather than focusing on specific channels or journey stages.
Better managing the entire customer journey from acquisition to loyalty was the most-cited priority at 46 per cent, followed by improving cross-channel experiences at 45 per cent, and expanding content marketing capabilities 42 per cent.
According to the report findings, experience-driven businesses have already fully committed to CX excellence. Respondents rated their organisations highly on various individual experience categories, but have difficulty implementing CX best practices across categories.
Nicholas Konopoulos, Head of APAC and EMEA Commerce Marketing at Magento, said what most businesses underestimate is the scale of organisational behavioural change and challenges they’re going to encounter.
“One of the first things to be aware of in order to become an experience-driven enterprise is the need to understand who you are as a business, and what it is you’re trying to achieve.
“A lot of businesses just don’t have that rallying vision, and that can impact the change.”
Identifying an experience-driven business
The report noted two ways experience-driven businesses differ with others.
First, they invest deliberately in initiatives and technologies supporting strong CX. They will have dedicated budgets for certain CX and marketing initiatives.
Notably, experience-driven businesses invest in cross-channel experience design — with dedicated, growing budgets for mobile, web, and physical location design — and in areas like customer analytics and real-time interaction management, to help inform and optimise those experiences.
Kontopoulos said, “If you think about the iconic brands out there that are really delivering great customer experience, their CMOs, their marketing department, are incredibly baked into the wider enterprise and understanding how that experience is created and delivered.”
Second, experience-driven businesses make customer-obsessed, long-term trade offs. Forrester data shows these types of businesses sacrifice short-term wins in favour of creating holistic experiences.
For example, experience-driven businesses report a greater average year-on-year increase in time-to-market — 2.2 times higher than firms that are more likely to go to market in silos.
These enterprises also drive business value at each stage of the customer life cycle. The report found these companies support strong business growth — with an average revenue growth rate of 23 per cent compared to 13 per cent among other customers.
They draw in prospects by capturing more mind share than their competitors, and win customers — their numbers of newly acquired customers are growing at twice the speed of other companies.
They also engage their customers. Their customers are 2.1 times more likely to download their apps, submit forms and requests for information, and engage on social media. They are twice as likely to visit the company’s web sites more than competing companies.
The businesses also retain customers, reporting up to 2.3 times higher year-on-year growth than other companies in customer retention, repeat purchase rates, average order values, and customer lifetime values.
What they also do is engage employees, with greater employee satisfaction compared to non-experience-driven businesses. When employees are happy in their jobs, customers are also happy.
Kontopoulos said, “We talk about customer experience, but we really should also start with the employee experience. Because, you know, at the end of the day, employees are responsible for delivering on the brand promise. The more promises we make — and the more promises we keep — the stronger trust can be built. Trust is the bedrock of customer experience.
The authors of the report have four recommendations for businesses to drive competitive advantages through their experiences.
First, companies should determine the level of urgency to transforming into an experience- driven business.
Second, businesses should lean into executive support as the cornerstone of CX transformation. The report said when there is no strong and sustained CX commitment from executives, CX transformations will fail.
Kontopoulos said when it comes to customer experience, it is absolutely critical that the CMO be seen as the customer experience orchestrator or conductor. Their job is to understand how that experience is created and delivered.
Third, model and track the ROI of being an experience-driven business.
Finally, businesses should invest in changing the organisational habits that undermine CX.
While being an experience-driven business is a proven strategy for driving long-term business success, it’s hard work to become one. However, fast-paced growth and changing market dynamics in the AP region raise the stakes of becoming experience-driven.
About this author
Athina Mallis is the Editor of the Which-50 Digital Intelligence Unit of which Magento is a corporate member. Members provide their insights and expertise for the benefit of the Which-50 community. Membership fees apply.